Cintia Solé
Lawyer at Marcos Martins Advogados
The plenary of the Federal Supreme Court, by a majority vote, ruled in a recent judgment that it was legitimate to carry out a search and seizure of assets sold in trust, clarifying the legal controversy that had been hanging over the constitutionality of article 3 of Decree-Law 911 of 1969.
This is because, in view of the fact that the search and seizure of property given as fiduciary collateral was allowed in the event of the debtor’s default, with the consequent promotion of the sale of the property to settle the creditor’s balance, there was debate about its possible affront to the principle of due process of law, and its reception by the Magna Carta, given that it was enacted before the 1988 Federal Constitution came into force .
The initial claim in the case which was the subject of the decision concerned a search and seizure action brought by the appellant bank against the respondent debtor due to default on the installments of the financing of a vehicle given as a fiduciary guarantee.
A judgment was handed down by the Minas Gerais Court of Appeals dismissing the suit on the grounds that Decree-Law 911 of 1969 was at odds with the principles of due process of law, adversarial proceedings and ample defense laid down in the 1988 Federal Constitution.
In Extraordinary Appeal RE 382928/MG, the respondent emphasized the correctness of the decision, while the appellant argued that the absence of ownership of the fiduciary debtor over the asset offered as collateral – with only direct possession remaining – would imply the search and seizure of the vehicle in order to enable the creditor to regain possession of it, a factor considered by the judge when granting the search and seizure injunction, which was duly complied with.
In an unsuccessful vote, Reporting Justice Marco Aurélio argued that the decision handed down in the interlocutory appeal was correct, voting to dismiss the Extraordinary Appeal on the grounds that there was incompatibility between the aforementioned Decree-Law and the Federal Constitution.
Similarly, Justice Edson Fachin, in the minority, voted to dismiss the appeal and maintain the dismissal of the case due to the “lack of legal basis for the preliminary injunction for search and seizure, as established by Decree-Law 911/1969, prior to Law 13.043/2014.”
The losing votes were then joined by Justices Ricardo Lewandowski and Rosa Weber.
Justice Alexandre de Moraes, on the other hand, cast the winning vote, which was joined by Justice Gilmar Mendes and the other justices, deciding to uphold the appeal to dismiss the case and order the trial to continue in the court of origin.
This is because, according to his opinion, the judgment in question diverges both from the understanding of the Superior Court of Justice – “guardian of infra-constitutional rules” – and from the understanding established by the Full Bench of the Federal Supreme Court, which ruled that Decree-Law 911 of 1969 had been accepted by the 1988 Constitution, a precedent applied in the judgment of RE 599698, ARE 910574 and other appeals.
Minister Alexandre de Moraes also pointed out that the text of the aforementioned decree was amended by Laws No. 10.931/2004 and No. 13.043/2014, corroborating its reception by the Constitution and granting greater effectiveness and agility to the fiduciary guarantee, while encouraging the guaranteed operation, deferring the contradictory to a moment after the act of constriction.
He also stated that, regardless of the adversarial process, it is fully possible to grant an injunction to search and seize the vehicle given as collateral, consolidating the fiduciary creditor ‘s ownership and possession after 5 (five) days of compliance.
In this regard, he voted to uphold the decision and, despite the fact that the extraordinary appeal is not subject to general repercussion, he was also willing to propose a judgment thesis aimed at giving greater objectivity to the precedent, under the following terms:
“ Article 3 of Decree-Law No. 911/69 was accepted by the Federal Constitution, and the successive amendments made to the provision are equally valid”.
In this way, the Supreme Court recognized the constitutionality of Decree-Law 911 of 1969, especially with regard to its article 3 and the admissibility of search and seizure of assets sold in trust.
